Traditional GIS vendor market share for 2008-2009

Daratech has published its annual analysis of the GIS industry. I thought there were a few interesting things worth commenting on there. First I should say though that I am generally somewhat skeptical of these type of reports - there is a lot of subjectivity in what gets included and what doesn't. One illustration of this was when Bentley suddenly jumped to the number 2 position ahead of Intergraph a couple of years ago - and apparently kept that for a second year. While I was clearly not in an impartial position at that time (being CTO of Intergraph), this went against the intuition of myself and others I talked to in the industry - the general feeling was that somehow Bentley had persuaded Daratech to count a lot of "CAD" revenue as "GIS". And to be fair, there is a lot of debate about how much of Intergraph's revenue is "GIS" and should be counted here. For example, Intergraph does a lot of business providing 911 call taking systems in the Public Safety space, which have a strong geospatial element to them - do you or don't you count those in this number? There is a good argument in favor, but it might not be what everyone calls "GIS". In this year's version, Intergraph's revenue is twice that of Bentley (which is hard to reconcile with Bentley being second last year).

Anyway, all those caveats notwithstanding, the top three vendors for 2009 are projected to be ESRI with 30%, Intergraph with 16%, and GE Energy (Smallworld) with somewhere around 8% (exact figure not stated in this summary, approximate figure deduced from chart). No surprise to see ESRI and Intergraph in the top two spots, which has been the generally accepted state of affairs for most industry observers for a long time. From a personal perspective it is nice to also see Smallworld (GE) still in the number 3 spot, where they have been on and off - there are several others vying for that (so my former companies get 2 of the top 3 slots!). The report also says that GE/Smallworld has top position in utilities with 24% of the market - almost as strong as ESRI's position in the overall market.

I think it's interesting though that ESRI's share (which is consistent with previous reports) is actually lower than many people perceive. ESRI clearly is the dominant player in the traditional GIS space, they enjoy an effective monopoly in many markets (for example see Andrew's recent post on a US Air Force sole source bid), and their "mindshare" is pervasive. Many people I talk to, especially those in the "neo" world, assume that "everyone" doing "traditional GIS" is using ESRI. But what this report says is that 70% of people are not using ESRI (well 70% of the revenue comes from people not using ESRI, which is not necessarily the same thing - but nevertheless, a lot of people are not using ESRI). But you have to give ESRI credit for the way they have achieved such "thought domination" with "only" a 30% market share. I often think that there are several interesting comparisons to draw between the dominant positions of ESRI and Microsoft in their respective markets (maybe there is more for a future post there). Microsoft has operating system market share of 90%-ish, and Apple somewhere around 8%, but Apple has arguably more thought leadership and buzz around its offerings than Microsoft does. But there is very little of that sort of alternative thought widely seen in the traditional GIS space, even though Intergraph and Smallworld still have certain areas where they have technical advantages and/or alternative approaches to offer compared to ESRI.

However, we are now seeing more diversity of thought reaching a broader audience from the "neogeography" side of the house, which is a good thing for the industry. And this leads into the other area that I wanted to comment on, which is how it is increasingly hard to do this kind of market share analysis on the geospatial market, as geospatial technology becomes more imbedded in mainstream IT. As geospatial data becomes just another data type and becomes an element of many different applications, how do you say that a given application is "geospatial" or not? There is no place on this list for Google, Microsoft or Oracle, for example, all of whom clearly play a major role in the geospatial market these days. And there is nothing that captures the strong growth that I perceive in open source geospatial software (by definition, software revenue is not going to be a good metric for measuring the market share of free software!).

So overall, while there are certainly some interesting tidbits in this Daratech report summary, it is not at all reflective of the overall state of the broader geospatial industry, where it is increasingly hard to even define the market, let alone to measure market share in a quantitative way.

For those that are interested in quantitative analysis of the "traditional geospatial" market, I would also suggest considering the annual Geospatial Technology Report from GITA, which uses an alternative approach based on survey responses from GITA member organizations. There are potential flaws in that methodology too, but in many ways it is less subjective than something based on vendor revenues, and it provides a lot of additional detail on various aspects of how people are using the technology, which I have found interesting in the past. It's also a lot cheaper! (I should add for full disclosure that I am a former member of the board of directors of GITA, but I receive no remuneration for sales of GITA reports!).

Update: Matt Ball has a good post discussing the relevance of these type of industry reports.